1.a useful technique for determining which
inventories should be managed more closely and which others should not (A is
most important)

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ABC inventory matrix

used to identify whether a firm?s physical inventory
matches its inventory usage. It is derived by plotting an ABC analysis based on
inventory usage classification on the vertical axis and an ABC analysis based
on physical inventory classification on the horizontal axis

Acceptance sampling

a statistical screening technique that can be used to
determine whether or not a shipment will be accepted, returned to the supplier,
or used to for bill back purposes when defects are fixed or units are
eliminated by the buyer

APP

Aggregate production plan a long range production plan
that sets the aggregate output rate workforce size utilization inventory and
backlog levels for a plant

Analytic SRM

allows the company to analyze the complete supplier base

Applistructure

1.a term used to describe the merger of enterprise
application and infrastructure technology

Available to Promise Quantity

1.the uncommitted portion of a firm?s planned
production, used to promise new customer orders

Backward Vertical Integration

favoring manufacturing over buying

Benchmarking

the practice of copying what other businesses do best
studying how things are done will in other firms to potentially make use of the
same methods

Best of Breed Solution

1.picks the best application or module for each
individual function when implementing an ERP system

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Bill Bonds

successful bidder will fulfill the contract as stated

Bill Back Penalty

1.a fee charged back to the supplier for services
or products not received by the customer

Bill of Materials

an engineering document that shows an inclusive
listing of all component parts and assemblies making up the final product.

Blank Check Purchase Order (PO)

1.a blank check to pay the supplier if the exact
amount in unknown but there is a maximum amount to prevent abuse from the
supplier attached at the end of PO

Blanket Order Release

1.release a specific quantity of materials to
satisfy in part or whole to the Blanket PO

Blanket Purchase Order

1.covers a variety of items, and negotiated for
repeated supply over a fixed time period

Break-Even Analysis

1.a technique that uses the fixed and variable
costs to determine the quantity where the total costs are equal between two or
more alternative handy cost-effectiveness of sourcing decisions when cost is
the most important criterion, revenue equals fixed + variable

Bullwhip effect

1.- ineffective communication between buyers and
suppliers and infrequent delivery of materials, combined with production based
on poor forecasts along a supply chain that results in either too little or too
much inventory at various points of storage and consumption simply it causes an
amplification of the variation in the demand pattern along the supply chain

Business Cycle

alternation periods of expansion and contraction in
economic activity

Business Process Reengineering

1.a systematic automated approach to change
management through assessments of current processes design of better processes
using modeling techniques implementation of the new processes and continuing
performance assessments

Capacity

a firm?s labor and machine resources

Capacity Planning

1.planning process that is used to determine the
capacity needed for a specific production level

Capacity Requirements Planning

1.a short range planning that is used to check the
feasibility of the material requirements planning

Cause and Effect Forecasting

1.assumes one or more factors independent variable
are related to demand and therefore can be used to predict future demand

Centralized Purchasing

single purchasing dept located in a firm makes all
purchasing decisions

Change Management

1.remaining focused on core principles that do not
change regardless of the circumstances

Channel Equity

the value for a firm embodied in its distribution
channel

Chase Production Strategy

1.a production strategy that produces to match the
sales quantity during each production period

CISG

Contracts for the International Sales of Goods

Closed Loop MRP (Material Requirements Planning)

1.- planning and control system that incorporates
the aggregate production plan the master production schedule the materials
requirements plan and the capacity requirements plan

Co managed Inventories

collaborative form of VMI (Vendor Managed Inventories)

Collaborative Negotiations

1.both sides work together to maximize the joint
outcome or to create a win-win result

1.seeks input from customers on important issues
such as future buying habits new product ideas and opinions about existing
products

Continuous Improvement

1.constantly seeking improvements in all processes

Continuous Review System

1.inventory management system where the physical
inventory levels are counted on a continuous or daily basis

Co-Sourcing/Selective Sourcing

1.sharing of a process or function between
internal staff and an external provider

Counter Purchase

arrangement whereby the original exporter either buys
or finds a buyer to purchase a specified amount of unrelated goods or services
from the original importer

Countertrade

1.global sourcing may involve countertrade in
which goods and/or services of domestics firms are exchanged for goods and/or
services of equal value or in combination with currency from foreign firms.
This type of arrangement is sometimes used by countries where there is a
shortage of hard currency or as a means to acquire technologies

CPFR

1.collaborative planning forecasting and
replenishment business practice that combinesthe intelligence of multiple trading partners in the planning and
fulfillment of customer demand it links sales and marketing best practices such
as category management to supply chain planning and execution process to
increase availability while reducing inventory transportation and logistics
costs

1.when negotiating objective is to seek an outcome
that favors primarily one side?s interests

DOD

Department of Defense

Economic Order Quantity Model

1.classic independent demand inventory system that
computes the optimal order quantity to minimize total inventory costs

Economic Manufacturing Quantity

1.a variation of the classic EOQ model used to
determine the most economical number of units to produce

Economies of Scale

as the number of units purchased produced and
transported increases the cost per unit decreases

EDI

electronic data interchange computer to computer
exchange of business documents such as purchase orders order status inquiries
and reports promotion announcement and shipping and billing notices

Electronic Product Code

RFID Standard Managed

*RFID = Radio Frequency Identification

E-Procurement

electronic or computerized purchasing system.

- more in book about advantages/disadvantages

ERP

enterprise resource planning packaged business
software system that lets a company automate and integrate the majority of its
business processes share common data and practices across the enterprise and
produce and access information in a real time environment

ESI/concurrent engineering

1.assists in new product design to ensure cost
effect design choices, develop alternative conceptual solutions select the best
components and technologies and help in design assessment

Expediting

reactive approach to speed up an overdue shipment

FAR

Federal Acquisition Regulation

FASA

Federal Acquisition Streamlining Act

First tier suppliers/customers

1.suppliers are the ones who have the raw
materials and customers are the wholesale distributors

Fixed Costs

independent of output quantity

Fixed Order Quantity Models

1.used fixed parameters to determine the optimal
order quantity to minimize total inventory costs

Focal Firm

1.end product manufacturing firm

Follow-up

purchasing personnel need to ensure on time delivery
of the purchased material

Forecast Bias

measures the tendency of a forecast to be consistently
higher or lower than the actual demand

when purchasing personnel include environmental
considerations and human health issues in purchasing decisions

Green Supply Chain Management

extends the concept of green logistics to include
activities related to environmentally responsible product design acquisition
production distribution use reuse and disposal by partners within the supply
chain.

GSA

General Services Administration

Holding or carrying costs

incurred for holding inventory in storage

Hybrid Purchasing Organization

1.using both centralized and decentralized
purchasing, decentralize at corporate level and centralize procurement at
business unit level or the other way centralize at corporate level to negotiate
national contracts and decentralize buying at the business unit level

Implosion

DRP logic where demand information is gathered from
the field distribution centers and aggregated in the central warehouse and
eventually passed onto the manufacturing facility

Import Merchant

Buy and take title of the goods and resell to the buyer

Insourcing/backsourcing

1.reversing the decision to outsource or in fact
make rather than buy

INCO terms

International Commercial Terms to simplify
international transactions of goods with respect to shipping costs risks and
responsibilities of the buyer seller and shipper

Independent Demand

demand for final products and services demand pattern
that is affected by trends seasonal patterns and general market conditions

Indirect Costs

1.there are those cannot be traced directly to the
unit produced and synonymous with manufacturing overhead

1. forecasting
method in which the trend can be estimated using simple linear regression to
fit a line to a time series of historical data

LLP

- lead logistics provider- manages all of the firm?s
3PL?s

Make to Order Manufacturing Firms

1. make custom
products based on orders from customers resulting in long lead times and higher
unit costs

Make to Stock Manufacturing Firms

typically emphasize immediate delivery of off the
shelf standard goods at relatively low prices compared to the chase strategy

Manufacturing Resource Planning

outgrowth and extension of the closed loop MRP system

Master Production Schedule

1. medium range
plan and is more detailed than the aggregate production plan

Match or Tracking capacity strategy

1. moderate
strategy that adjusts capacity in small amounts in response to demand and
changing market conditions

Merchants

wholesalers and retailers who purchase for resale in
large volume for discounts

Micro Purchases

government purchases of 2500 or below

MR

material requisition - start of purchasing process when
a customer places an order for the use of a finite amount of materials for the
future

MRP (Materials Requirements Planning)

software application that performs an analysis of the
firm?s existing internal conditions and reports back what the production and
purchase requirements are for a given finished product manufacturing schedule

1. raising the
final requirements of the component beyond 100 percent in a super bill of
materials to cover uncertainty

Pareto Analysis

1. graphic
technique that prioritizes the most frequently occurring problems or issues,
problems falling into the most frequently occurring category be assigned the highest
priority and managed closely

Payment Bonds

protect the buyer against any third party liens not
fulfilled by the bidder

Performance Bonds

1. guarantee
that work of bidder meets specification and will be completed on time

1. small cash
reserve maintained by a mid level supervisor to purchase materials and gain
full reimbursements

Periodic Review System

- reviews of physical inventory at specific points in
time

Planned Order Releases

1. used to
release MRs for when firms purchase components to make goods over a long period
of time, place orders directly with the supplier

Planning Time Fence

1. tentative
segment, typically stretches from the end of the firmed segment to several
weeks farther into the future

Purchase Order (PO)

used to trace any missing or unaccounted for purchase
order, duplicates used to for accounting dept. for future payment

Post Transaction Costs

field failures, maintenance costs, warranty costs

PR

purchase requisition- same as MR used in other firms

Price break point

the minimum quantity required to receive a quantity
discount

Process integration

1. when you coordinate
and integrate these processes among the focal firm and participants of its
supply chain

Product Family

1. consists of
different products that share the same characteristics components or
manufacturing processes

Profit-Leverage Effect

1. impact of a change
in purchase spend on a firm?s profit before taxes

2. Public
procurement/purchasing- management of purchasing and supply management function
of government and nonprofit sector

QR/service response logistics/integrated logistics

1. when
wholesaling and retailing focus on location and logistical issues

Quantity Discount Model

1. one variation
of the class EDQ model where in purchase is allowed to vary with the quantity
purchased

Radio Frequency Identification (RFID)

1. technology
that enables huge amounts of information to be stored on chips and read at a
distance by readers without requiring line of sight scanning

Resource Requirements Planning (RRP)

long range capacity planning module used to check
whether aggregate resources are capable of satisfying the aggregate production
plan

Reverse Auctions

online bidding arrangement whereby suppliers try to
underbid each other to win a purchase order

RFP

1. request for
proposal will be issued instead in the component is pretty complicated and tech
specs cannot be determined for the RFQ propose new materials and tech to
exploit suppliers

RFQ

1. request for
quotation to acquire as estimate for a MR before an order is place, when no
supplier is identified quotes from various suppliers are obtained to fulfill
the MR

ROA/ROI

1. firm?s net
income over total assets

ROP

reorder point, lowest inventory level at which a new
must be placed to avoid a stock out during the order cycle period

Sales Order

suppliers terms and conditions for a particular MR or
PO

SCM

1. managing
supply and demand, sourcing raw materials and parts, manufacturing and
assembly, warehousing and inventory tracking, order entry and order management,
distribution across all channels, and delivery to the customer.

Simplification

1. - reduction
of components, supplies, or standard materials, used in the product or products
process design.

Single Source

for core materials, and cooperative supplier buyer
relationships but very risky

Six Sigma

1. total quality
management in which maximum quality is ensured from suppliers to internal
production facilities

1. extension of
blanket PO to require the supplier to maintain a specific amount of inventory
available at any time for the purchaser.

Strategic partnerships

1. with
suppliers warehousing and transport companies distributors and customers who
are good at what they do

Strategic Sourcing

1. managing the
firm?s external resources in ways that support the long term goals of the firm

Subcontracting

when firms license vital components or operating to
another firm in order to meet unforeseen high demand by focusing their efforts
on other vital operations, strict terms and conditions expand short term
capacity

Supplier Development

1. any activity
that a buyer undertakes to improve a supplier?s performance and/or capabilities
to meet the buyer?s short and long-term supply needs lack of suitable
suppliers, firms assist existing or new suppliers to improve processing
capabilities quality delivery and cost performance by tech and financial
assistance

Supplier partnerships

developing long-term win-win relationships with
suppliers

Supply Chain Integration

when a firm realizes it needs supply chain management
to bring together the firm and its key supply chain participants to help
determine joint policies and regulation and determine what they can do well

Supply Management

1. -
identification acquisition access positioning and management of resources the
organization needs or potentially needs in the attainment of its strategic
objectives

Time Series Forecasting

based on the assumption that the future is an
extension of the past thus historical data can be used to predict future demand

Transactional SRM

enables an organization to track supplier interactions
such as order planning order payment returns and so on

Traveling Requisition

for material requisitions on a recurring basis.

Trend Variations

1. represent
either increasing or decreasing movement over time and are due to factors such
as population growth population shifts cultural changes and income shifts
linear s curve exponential or asymptotic

UCC

Uniform Commercial Code governs the purchase and sale
of goods

Vertically Integrated Firm

relies on a one time supplier or customers

Weighted moving average forecast

allows greater emphasis to be placed on more recent
data to reflect changes in demand patterns

Simple Moving average forecast

1. uses
historical data to generate a forecast and works well when the demand is fairly
stable over time

Simple Linear Regression Forecast

equivalent to the trend forecast but the x variable is
no longer time but variable of demand

Simple Exponential smoothing Forecast

sophisticated weighted moving average forecasting
technique in which the forecast for the next period?s demand is the current
period?s forecast adjusted by a fraction of the difference between the current
period?s actual demand and forecast, requires less data than the weighted
moving average method

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